Brazilian block Belgian Fries
Brazil has initiated an antidumping investigation, last year, against Belgian producers of potatoes (Lutosa, Clarebout, Mydibel and Ecofrost); the investigation also includes French, Dutch and German potatoes. According to the Brazilian government, the potato exporters have practiced dumping prices in the Brazilian market. These companies are in risk of having an additional fee over their exports.
During a networking event, yesterday at the Belgian Embassy in Brasilia, The Potatoes exporters stated that 71,000 tons of Belgian frozen potatoes were exported to Brazil in 2015. There is no doubt that Brazil has an expressive consumer market, however, protectionist and monopolist forces jeopardize this market.
Although the investigation did not finish yet, there are high chances that a temporary anti-dumping tax – additional to the existing import levies on frozen potatoes – will be approved this month. The extra tax costs for Belgian companies can get up to 40 percent, making Belgium potatoes less competitive. Belgian politics, diplomats and executives are doing everything to avoid the approval of such fees.
Brazilian officials from the Ministry of Finance and representatives of the Belgian Federation of Frozen Potatoes (Belgapom) were also among the embassy event guests. Belgian companies advocates that there is no dumping, only Brazilian protectionism. Roland Saldanha, Sidera Consult representative, company that defends the interest of about 60 Brazilian importers of Belgian, French, German and Dutch frozen potatoes and Belgapom, made an important consideration: “The whole process is designed to make Bem Brazil the only Brazilian frozen potatoes producer “.
Bem Brasil produces 79,000 tons of potatoes, It has plans to build a new plant with a production capacity of 115,000 potatoes tons. The final decision is expected to be released between October 2016 and June 2017. If the Brazilian government decide to apply the anti-dumping duty upon Belgian companies, there is an alternative available. Companies affected by this measure might start a proceeding at the Public Interest Group, now managed by the Brazilian Ministry of Finance.
Brazilian companies or organizations that feel aggrieved by the additional charges can initiate this proceeding under the argument that it would affect the general interest of the Brazilian people. If the companies proves that this measure harm the Brazilian interest, the government might terminate the measure.
A new association – including a coalition of Brazilian importers and restaurants – is set up to start the procedure. Nele Cattoor from Belgapom said “It will be argued that the higher rates of inflation, which is already above 10 percent in Brazil, will boost, additionally, the Brazilian production is not enough to meet consumer demand,”. With these strong arguments, the association aim to terminate the dumping duty upon the exports of potatoes to Brazil.